Establishing Personal Jurisdiction in US Court Over Foreign Defendants

August 23, 2022

Types : Alerts

US federal courts, with sophisticated judiciaries and well-developed bodies of law, are very attractive forums for resolving international disputes. Yet, the question of when US federal courts may exercise personal jurisdiction over foreign defendants (in the absence of contractual consent) is still evolving and subject to litigation, as demonstrated by the Fifth Circuit’s recent decision in Douglas v. Nippon Yusen Kabushiki Kaisha.

A foreign defendant is subject to “specific” personal jurisdiction in US federal courts when the alleged injury or damage arises from or relates to its specific contacts with the forum. In those circumstances, the “long-arm” of personal jurisdiction may reach foreign defendants. For example, a foreign insurance company is subject to specific personal jurisdiction in a US federal court when a claim arises under a cargo insurance policy covering a shipment to the US.

But, what if the alleged injury or damage is not related to the foreign defendant’s specific contacts with the US forum?

The Supreme Court’s decision in Daimler AG v. Bauman (2014) held that a defendant is subject to so-called “general” jurisdiction—i.e., for all purposes and claims—when it is “at home” within the forum. This rule recognized the due process protections of the Fourteenth Amendment. Most circuit courts of appeals have also recognized the same due process protections under the Fifth Amendment.

Notably, these constitutional due process protections are substantive. They cannot be set aside by a federal rule of civil procedure, like Rule 4(k)(2), that allows for nationwide service of process in certain circumstances. Procedural rules cannot override substantive constitutional protections—not even in the special admiralty context. In this sense, the Fifth Circuit’s en banc analysis in Douglas v. Nippon Yusen Kabushiki Kaisha, with multiple concurrences and dissents, is a masterclass in personal jurisdiction over foreign defendants.

So, how do plaintiffs establish US federal courts’ personal jurisdiction over foreign defendants? First, procedurally, plaintiffs must serve process under applicable procedural rules, like Rule 4(k)(2) or an international convention. Second, substantively, plaintiffs must show that US federal courts’ exercise of personal jurisdiction, whether general or specific, complies with due process. These two requirements are essential to invoking the significant benefits of the US legal system.